APPENDIX An Approach to Answering Problem Questions This appendix explains an approach to answering problem questions, in contract. There is no model answer to any examination proble question. However a systematic approach to answering such questions will ensure that the question is answered clearly, logically and thoroughly, There is a four-step approach to answering problem questions: 1, identify the legal issue or issues in the question; 2. state the law on the legal issue or issues; 3. apply the law to the facts of the problem; and 4. conclusion, Students can also apply this approach to any other law subject and not just necessarily on the subject of contract, Those studying Shari’at law subjects will also find this approach practical SAMPLE QUESTION On I November, Ahmad who lives next door to Hussain called on Hussain and offered to sell his IBM computer for RM2,000. On 3 November, Hussain wrote and posted a letter to Ahmad accepting the offer. The letter was not addressed properly. Hence Ahmad received the letter of ‘acceptance on 8 November instead of on 5 November. On. the evening of 6 November, Ahmad telephoned Hussain and said “I revoke my offer to you’ Advise,Stop 1 Td the legal issue or issues in the question, Problem solving questions are normally drafted in a form requiring students to address their minds to certain issues raised by th problem. The issue or issues once identified will enable the students, to move on to answer the question systematically. The issue can be drafted in different styles or ways but it should narrow down the particular arca of law that the examiner wants the students to elucidate. In the above sample question, to say that the issue in the question is whether there is a contract between Ahmad and Hussain isto put the issue too broadly. This will apply to almost every question relating to the formation of a contract, whether the issue is on offer, acceptance, consideration or intention to create legal relations, for ultimately one has to conclude whether or not there was a contract between the parties. Similarly to say that the issue is whether Ahmad can sue Hussain or whether Ahmad ean ‘obtain damages from Hussain for breach of contract again states the ‘conclusion rather than identifying the issue. Therefore students should state the issue or issues specifically. In the above question, there are several issues (@) whether Hussain’s acceptance of the offer through the post is a usual and reasonable manner of communicating acceptance under section 7(b) of the Contracts Act 1950; (b) when the communication of acceptance was complete; and (©) whether Hussain’s communication of revocation of his offer by telephone on 6 November was e the offer eetive to revoke Students are advised to tackle one issue at a time and bring it to its logical conclusion. This will ensure clarity in presentation and avoid unnecessary confusion that may set in if tackled together. 1 issues are all FIRST ISSUE Step 2 — State the law ‘You should state the law that is relevant to the issue, Remember that the Contracts Act 1950 is the primary source of law for contracts seo Fs wt entered info in Malaysia, Therefore the provisions of the Contracts, Act 1950 should always be the starting point, IF there are no provisions in the Contracts Act 1950 on the issue in question, state so in your answer, Inthe above issue, the relevant sections are sections 3 and 7() of the Act. Section 3 provides that the law deems that the communication of acceptance is made by any act or omission of the party accepting, by which he intends to communicate the acceptance or which has the effect of communicating it If there are any relevant cases, they should be stated here Section 7(b) provides that in order to convert a proposal into a promise the acceptance must be expressed in some usual and reasonable manner unless the proposal prescribes the manner in which itis tobe accepted. Here itis clear that there was no prescribed manner of acceptance. Therefore the issue is whether it was usual and reasonable for Hussain to accept the offer by return of post. Students should then state any relevant cases on the issue of the usual and reasonable manner of communicating acceptance Step 3—Apply the law Having thus stated the law on the first issue, the next step isto apply tho law to the facts of the problem. Hussain and Ahmad are neighbours. Ahmad had ‘called on’ Hussain in making the offer. The word ‘called on’ may be taken to be alittle ambiguous by some students — whether Ahmad went to Hussain’s house or called him by telephone. This is a minor point and either way makes no difference tothe result, Students may like to point this out to the examiner, but should do so briefly and move on tothe real crux of the matter. Being neighbours, was itusual and reasonable for Hussain to use the post? He could have just called over to Ahmad’s house or gave a telephone call. There may bea difference of opinion here. Apparently, it is unreasonable, But some students may point out that a letter would give Ahmad an acceptance in writing, which is certainly better than an oral acceptance. However it may be rebutted that Hussain could have handed over the leer to Ahmad, which is reasonable, rather than to post it.Itis at this stage of applying the law to the facts of the problem that students will be able to display their understanding of the relevant principles of the law of contract to the examiner. Many students skip this stage by doing what is termed as a matching game — ‘since the facts of the problem is similar to the case of 4 v B cited above, therefore there is a contract between Abmad and Hussain’ (premature because there are yet other issues to be considered) or “since the facts of the problem is similar to the case of A v B, therefore the communication of acceptance was reasonable’ or was unreasonable’. No two cases are similar. There are bound to be differences in the facts or circumstances. Rarely would a good examiner require you to do such a ‘matching game" by giving the facts ofthe question exactly as those of a decided ease Usually the question would involve a situation where there are no decided cases exactly on the point, a novel situation where there are conflicting decisions on the issue and the examiner wants you to discuss the areas of conflict, But by just repeating the facts of a decided case ad nauseam and then match it with the problem question does not display your understanding of the principles, It shows that you have a good memory, but in today’s communication age, a computer can do a much better job than you! Step 4~ Conclusion Having applied the relevant law to the facts of the problem in issue, you are ready to arrive ata conclusion. Inthe first issue most students ‘may conclude that in the circumstances of the case it was unusual and unreasonable for Hussain to use the post to communicate his acceptance to Ahmad, his neighbour, who was living next door to him. Therefore Hussain’s purported acceptance did not convert the proposal into a promise when it was posted on 3 November. Other students may arrive at the conelusion that it was reasonable and that there was an effective acceptance by Hussain when he posted the letter on 3 November. So long as good logical reasons are given when discussing Step 3, examiners do give leeway for such differences of opinion and eventual conclusions. Even judges in the Foderal Court differ in their reasoning and conelusions, Having concluded the first issue, the second issue may then be tackled using the same process of Steps 2, 3 and 4, SECOND ISSUE Step 2~ State the law State the law starting with the provisions of the Contracts Act 1950, ‘on the postal rule, that is, section 4(2), Provide relevant cases on the issue including the issue of delay in the post. Steps 3 Applying the law to the facts, students may argue that although under section 4(2)(a) and decided cases, acceptance is complete against Ahmad upon Hussain posting the letter, the fact that the manner of acceptance was unusual and unreasonable may call for 1 departure from the normal rule. It may be submitted that in this case the acceptance should not be deemed complete on 3 November but on 8 November. It is only fair that Ahmad be bound in contract, to Hussain when he actually received the letter of acceptance on 8 November. 1d 4 — Apply law to facts Students who concluded that the manner o able would naturally argue that acceptance was complete against Ahmad on 3 November despite the delay in the post However it must not be forgotten that the letter was misdirected and caused Ahmad to receive it later than usual, Students conversant with the facts of Adams v Lindsel! would be able to point out the difference that whilst in that case the offeror misdirected the letter and caused a delay in the communication of the offer, here it was eptor who misdirceted it. Though this misdirection makes no fence to students who concluded that the communication was complete on 8 November, itis a contentious point whether with this misdirected acceptance was completed on 3 November. The reason, is that the law has already placed a disadvantage on the offeror by binding him in contract at the point of posting of the acceptance ‘when, atthe said time, he is not aware of it, When Hussain posted it on 3 November Almad only came to know of it on 8 November when he received the letter of acceptance. However the law says that Ahmad is bound on 3 November (section 4(2)(a)), whereas Hussain is only bound on 8 November (section 4(2)(b)). Although a delay in the post normally does not affect the postal rule, here it ‘was Hussain who caused the delay and not the postal authorities, seeptance wasIt is arguable that Hussain should be penalised here and that the ‘communication of acceptance should only be deemed complete as, against both Hussain and Ahmad on 8 November. THIRD ISSUE Step 2 State relevant law State the relevant law on revocation of offer — section 6(a) and section 5(1) read with section 4(2)(a) — and relevant ca Step 3 — Display understanding of the law From the foregoing arguments, there are two possible dates of completion of communication of acceptance against Ahmad 3 November and 8 November. Whatever may be your position, you should tackle both possibilities and display your understanding of the lav. In this question, whether the acceptance was complete against Ahmad on 3 November or 8 November is vital. If the acceptance is deemed complete against Ahmad on 3 November, his revocation on 6 November came 100 late. He is already bound in contract under section 4(2)(a) and cannot revoke his acceptance: section 5(1). Ifthe acceptance is deemed complete on 8 November, then by virtue of section 5(1), Abmad could revoke his offer at any time before the communication of acceptance is complete as against him, ie. at any time before 8 November. He did revoke it well in time on 6 November and therefore there was a valid revocation of his offer — section 4(3)(b). Step 4— Conclusion Students may then conclude that if there was a valid revocation by Ahmad, then, there was no valid and binding contract between Hussain and Ahmad. However if the revocation came too late, there ‘was a binding contract between Ahmad and Hussain on 3 November, POINTS TO NOTE 1. Do not waste time in repeating or rephrasing the facts of the problem question when starting to write your answer. Ponts 100m For every authority on the issue, the starting point should bbe the provisions of the Contracts Act 1950. If there is 3. When citing decided cases as authority, always cite Malaysian cases first in preference to Indian or English cases, Indian and English cases are not binding on Malaysian courts, ‘You should know at your fingertips, he hierarchy of courts inn Malaysia (foday and in the past) and which case is of a higher authority than another. A rough guidance is as follows. a) Federal Court decisions (24 Ime 1994 onwards) (b) Supreme Court decisions (January 1985 o 23 June 1994) (©) Decisions of the Privy Council on appeals from Malaysia (efore 1985) (© Decisions ofthe Privy Council on appeals from Commonwealth counties (including India) before 1985 on provisions oftheir respective statues on contract which are in pari materia to the Contacts Act 1950 Note: Appeals fiom Singapore to the Privy Council do not bind ‘Malaysian courts because Singapore follows the common law and does not have a statute on the law of contract, ‘The decisions of the above superior appellate courts bind the Court of Appeal of Malaysia. (©) Court of Appeal devsions (24 June 1994 onwards) (The former Federal Court decisions (before 1985) The decisions of the above superior appellate courts bind the High Courts of Malaysia, (@) High Court decisions (do not bind otter High Cours in Malays, ‘The decisions of the High Court bind the Sessions Courts in Malaysia The decisions of the following courts do not bind Malaysian Courts, but are of persuasive authority (6) Decisions ofthe Privy Council on appeals from Commonsalth ‘sounties, a in (2) above after 1984(i) Decisions aft tribunal in any Commonwealth country ete the provision of is respetve siatte on contact i pari materia othe Contacts Act 1950, for example, decisions ofthe Supreme Court of india ) Decisions ofthe Privy Couns on appels fom Commanwelth counties, for example, Singapore, Hong Kong (before 1997) Australia, New Zetland, South Afi, et (k) House of Lords decisions () The English Cour of Appeal dovisions (=) The ions ofthe highest tribunal in any Commonweath for example, Singapore, Hong Kong (before 1997), Australia, New Zealand, South Aca, ee (a) Decisions of the highest tribunal ia any other non Commonwealth country, for example, the United States of America 101 Questions on Contracts PROPOSAL (OFFER) AND ACCEPTANCE Question 1 Examine whether there is an enforceable contract between the parties in the following circumstances. (a) Saleem advertised in the columns of the Malay Mail a 1985 model Toyota car for sale, Hafeez sent the following telegram to Saleem: Interested in buying the Toyota Cr. Qu lowest price. Tothis Saleem replied The lowest price that can offer'is RM17,000". Hafeez replied ‘I agree to buy the car for RM17,000", Saleem did not care 1o answer Hafeez. After waiting for a few weeks Hafeez _20¢8 10 Saleem with the money to buy the car. Saleem refuses to sel (b) Rashid offers Mat RMI,000 if he jumps across Bentong Gorge on his motorcycle, When Mat started his motoreyele and reached the spot and was about to jump, Rashid shouted at that moment withdrawing his offer. However, Mat crossed the Gorge safely. Is Mat entitled to RM1,000? @ o @ ) Question 2 State the circumstances in which a proposal may be sminated with reference to the Contracts Act 1950 and decided cases. Is there a binding agreement in the following cases @ —Alvand Babe conclude a verbal agreement forthe sale of a house subject toa cont to be drawn up by their solicitors and signed by both partis, (Gi) Dollah agrees to buy Comel’s car subject fo Dollah’s wite grecing to the sal, Question 3 ‘When a contract is negotiated by telephone, telex or other forms of instantaneous means of communication, the {is not complete until the acceptance is actually received by the proposer.” Discuss with reference to the Contracts Act 1950 and decided cases. Abdullah who lives next door to Saleem went to house proposing to sell his Proton Saga for RM15,000 to be accepted by 3 September 1992. On 3 September 1992, Abdullah sold the ear to Ubaidullah and sent a letter 10 Saleem revoking his proposal, The letter reached Saleem ‘on 10 September 1992, On 6 September 1992, Saleem telephoned Abdullah accepting the proposal. Abdullah said that he has already sold his cat. Advise Saleem: eem's (Whether Abdullah can revoke his propostl before 5 September yo92 (i) The effect of Abdallah’ ener of revocation; and ii) Saleem’s acceptance ofthe proposal Question 4 Eric in Kuala Lumpur offers to sell 1000 tons of oil palm to Faizal at a certain price to be shipped on the vessel MY Surabaya on I March 1992 and arriving at Surabaya, Indonesia on 10 March 1992. Faizal telephones from Surabaya to Eric to accept the offer. However, Eric was not in the office at the said time. A tape- recorded voice